Why would anyone invest in something they don’t understand?
When Darrell Grable first heard about equity crowdfunding, he saw a real challenge in explaining, for example, what in the world a nootropic stack is to a new audience. As a senior writer for Neurohacker Collective, he writes for a company selling supplements that help support mental performance and brain health. The material is palatable enough when presented to people already familiar with the market, but for newcomers, it can be intimidating.
Looking back on their Wefunder campaign, Grable’s recognition of this challenge was one of the reasons the fundraising round worked. In November 2017, the company raised $800,454 from 309 investors, successful in part because of how digestible the campaign was to people completely unfamiliar with nootropics.
“One of my jobs was to normalize this little-known field to our more mainstream audience,” Grable said. “For example, while somebody may not know what a nootropic is, if you can cite a deficit they’d like resolved in their own life, they can see why this is an emerging field. A lot of our messaging focused on need and benefit more so than delving into the minutia of little-known subject matter.”
Grable’s first challenge was to show the potential for growth into much larger markets than just nootropics. By properly explaining the market, Neurohacker showed its larger organizational aims without underselling its current size.
An early push also helped. Neurohacker raised more than $250,000 in the first two weeks of its campaign by immediately informing its first circle of connections and social channels that the campaign was live. That momentum then transferred to Wefunder's built-in community of investors and was a tremendous boost in the first few weeks.
But the money slowed after about a month. The first wave of investors, Grable found, were the ones emotionally compelled by the presentation. Eventually, those people petered out.
Most successful equity crowdfunding rounds have at least something of a U-Curve -- that is, big initial investments followed by a lull and then a strong close.
In order to grab that close, Neurohacker posted a call to action one week before the end of its campaign. The idea was to entice the second round of investors -- the people who wait to see how the startup performs over the course of the campaign -- to join in.
After looking back on it, though, Grable doesn’t think it was just the last call to action that got the second round of investors interested. It was also consistently using the updates section throughout the campaign.
“I think that while your Wefunder campaign is live, if you treat the updates section like an opportunity -- like a newsletter -- and actually utilize that actively, it gives both current and future investors a peace of mind,” Grable said. “They're not investing in something that hasn't been addressed in a month or two or is falling apart. Just the subconscious repetition of knowing that this campaign and organization is on its A-game -- that's your opportunity to make a first impression about the type of organization you are.
“Do you keep your investors in the loop? That same behavior shows investors that you inherently value the communication aspect of your customer relationships. So it's sort of a canary in the mine of how you habituated the company.”
Neurohacker posted a whopping 24 updates to its Wefunder page during its campaign. Grable focused on making them look professional -- proper line breaks, sharp headlines, no obvious typos -- but the larger idea was to make updates more than just calls to investing. They weren’t just money grabs. Case in point: the second-most-liked Neurohacker update during its campaign simply thanked investors on Thanksgiving.
“A campaign is about people departing with their money -- they want to know that they're valued,” Grable said. “Even though it might not seem like a particularly important business decision, even though one might assume that investors aren't emotionally compelled to gratitude like that, they certainly are.”
Since its funding round closed on Wefunder, Neurohacker has launched another product, called Mind. It’s a one-step nootropics product instead of two, so while it’s still effective for comprehensive mental enhancement, it's much easier to use.
This gets to the root reason of why Neurohacker succeeded. It's not just a company that showed viable post-raise growth, but one that put the same amount of energy into its fundraising campaign as its business, ultimately the type of effort that turns hundreds of people unfamiliar with nootropics into investors.
Summary: To run a successful crowdfunding campaign, Neurohacker focused on 1) Highlighting both their current and growth markets 2) Posting frequent campaign and business updates to their Wefunder page 3) Sending an early call to action to their biggest fans 4) Sending a late call to action to pull in a second push of investors.
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